Why Twitter is Dead

 

Since its IPO in 2013, Twitter has been a well-liked company but a trodden down stock. In almost ten years that the company has been public, the stock price has hardly gone anywhere -- $10,000 invested in Twitter at IPO would be worth $10,370 today; hardly keeping up with inflation ($10,000 in 2013 dollars adjusted for inflation would be $12,341 today). Twitter may have the most stark contrast between its reputation and the stock price of any other company today. 

Many of Twitter's users revere the platform, not the least of which being Elon Musk, who uses only Twitter, and no other platform. Musk has often expressed his love for Twitter on the platform, and more recently -- his desire for it to be more transparent and promote free speech. Twitter is caught between a rock and a hard place, as it is constantly caught between protecting freedom of expression and not giving a platform to bad actors. While Twitter is not constitutionally obligated to provide a platform for free speech, it claims to be committed to it (though Musk and many others vehemently disagree).

The story has been confusing and constantly changing since Musk's first purchase of Twitter shares. Parag Agrawal, current Twitter CEO, did not help clear anything up with his statement on the matter. His thoughts, which he shared via Tweet as an image of text, started by saying the board was "...excited to collaborate and clear about the risks," but then toward the end of his statement, said, "...Elon shared [on the morning he was to be appointed] that he will no longer be joining the board. I believe this is for the best." These conflicting statements left many thinking there is more to the story than what is being openly shared. 

At this point, nearly everyone on Twitter was discussing Elon's potential buyout. The situation brought a huge amount of attention to the story, and while all eyes were on him, Elon pointed out that most members of Twitter's board had almost no significant ownership in the company, and were being paid $200,000 - $300,000 per year for what most would consider a very small amount of work on their part. Elon also proposed the idea of turning Twitter headquarters into a homeless shelter, which idea was also met with significant controversy.

Musk had already purchased a whopping 9.2% stake in the company, significantly larger than his friend and Twitter founder Jack Dorsey. Shortly after this purchase, Musk announced his desire to purchase all shares of the company, buying it outright at a significant premium. Al Waleed bin Talal Al Saud, a Saudi prince, businessman, and billionaire, Tweeted shortly after that he and his company would not be selling their 5.2% stake, as even Musk's offer does not "[come] close to the intrinsic value of @Twitter given its growth prospects."

Whether Talal actually believes in the future of Twitter is subject to speculation, but one can safely assume that a Saudi prince would not be well inclined to sell anything to Mr. Electric Car, let alone something Musk greatly desires. It is highly unlikely that this fact was unknown to Elon. Of all the opinions that have been freely spouted on this subject, allow me to present a possibility that I have not seen anyone talking about.

Elon knew from the start that he would not be able to buy Twitter. A 5.2% stake owned by a Saudi prince is huge, and is not something Elon would have not known going into this. Elon is frequently accused in the media of being too powerful, and many claim that he does whatever he wants with no consequences. If he were to start his own platform outright (which he had previously alluded to doing), he would be lampooned all the more, and would likely be met with opposition, even from his fans. Instead, Elon went through the motions, pretending to play by the rules, knowing that it would be impossible to take ownership of the company. 

I think Elon believes that Twitter and many other social media platforms engage in rampant censorship. Their algorithms are private, ambiguous, and mysterious. Those with radical beliefs have been restricted, shadow-banned, or kicked off altogether, and while Twitter has no obligation to give anyone a platform, Elon believes that "...Twitter serves as the de facto public town square," and that regardless of law, it is philosophically important that platforms provide transparency and freedom of expression. 

It was Elon's plan all along to start a new platform. In one fell swoop, he called out the gluttony of Twitter's board, made himself look benevolent by proposing the homeless shelter, which then made Twitter employees look like the bad guys for opposing it, and the situation ended with Elon looking like he tried to go the honest route but was locked out, and had no other choice but to start his own platform. 

The platform Elon eventually decides to create will probably be met with great success. Former president Donald Trump won't succeed in making his own platform, because he was controversial, a politician (Democrats have no interest in Truth Social), and because his platform was born in the sour grapes of his being permanently kicked off Twitter. Elon has an army of loyal followers -- he was one of the most active and most engaged Twitter accounts of the past year, and his followers represent nearly 35% of Twitter's daily active users (82m to 240m).

One can reasonably predict a few events as Musk makes his own platform. He will almost definitely invite Trump, Joe Rogan, and a few other controversial figures. While this action itself will be apolitical, it will bring hoards of conservatives that left Twitter when it banned Trump. Elon's platform will likely advertise itself as a transparent, middle-ground platform for everyone. Twitter has tried for nearly a decade to better monetize itself however possible. Its purchase of Vine was notorious for losing money for four years before eventually discontinuing the service altogether. Twitter is teetering on an abysmal stock price, a history of mismanagement and financial losses, and a frequently worsening reputation for malicious algorithms, shadow-banning, and censorship. 

The best case scenario for Twitter from here is losing half it's daily active users and getting bought by someone else. The stock price is still about 20% above where it was before Elon announced his stake. Elon has been acting intentionally from the beginning, and through this calculated action, exposed the board and curated his reputation as he proceeds with his next actions.